Search - consideration

It seemed likely, but unclear, to CRA, based on the limited information provided to it, that such charges were consideration for the service of the Funds in redeeming the units and, therefore, were exempted under para. (d) of the financial services definition as being consideration for the “transfer of ownership” of financial instruments (i.e., it apparently was sufficient that the unitholders ceased to be owners and that it did not matter that there was no new owner of the units). If, on the other hand, the redemption fees were consideration payable to the Fund manager for its service of “arranging for” the “transfer of ownership” of the units, CRA indicated that this created the possibility that such redemption fees were part of a single supply of taxable management services made by the manager (pursuant to a management agreement between it and the unitholders) for periodic management fees. ...

22 April 2021- 11:04pm CRA indicates that comparable sales of used MURCs for s. 191(3) purposes may reflect embedded GST/HST Email this Content In the context of an inquiry on determining the fair market value of a new apartment building (or other ”MURC”) when there is a self-supply at the time of substantial completion and first occupancy, CRA noted that where the cap rate used in applying the income approach to valuing the MURC was derived from comparable sales of occupied MURCs, such comparables may reflect “GST/HST that may be imbedded in the consideration for a supply as a result of the GST/HST having been imposed at an earlier time.” On the other hand, “where the consideration of a taxable supply of a residential complex is used as a comparable in a valuation methodology, the GST/HST imposed on that supply, even where the supply was ‘GST/HST included’, is excluded from the consideration.” ...

Upon its renewal, the policy is transferred to the employee for no consideration under s. 148(7), whereupon the employee starts paying the annual premiums. Given that the key employee has been including the annual premium in income as a s. 6(1)(a) benefit, does a further benefit arise on such transfer of the policy to the individual for no consideration? CRA indicated that s. 6(1) “may apply to include in the income of the individual the amount by which the fair market value of the policy exceeds any actual consideration paid by the individual for the policy.” ...

7 August 2022- 10:59pm CRA finds that MFT trailer fees paid to a dealer, and by it to its representatives, generally are GST/HST exempt Email this Content CRA indicated that where a dealer, who was a distributor of mutual fund units, received both up-front commissions and trailing commissions from the mutual fund manager, the trailing commissions were generally part of the consideration for the single supply made by the dealer to the manager, namely, arranging for the sale of the units, so that the trailing commissions also were exempt- even though there was an element of on-going servicing of the investors as well. Regarding front end load funds, where the investor is ordinarily charged an upfront fee or commission directly by the dealer upon the initial purchase, but the dealer also receive an ongoing trailing commission from the manager, CRA indicated that if the agreement between the manager and dealer “is for the distribution of units or shares of the fund, the supply made under that agreement by the dealer to the manager would [generally] be one of arranging for a financial service” even though the trailers are the only consideration received. ... CRA indicated that such amounts also were generally exempt consideration for an arranging-for financial service. 217144 is similar, but narrower in scope. ...

The consideration paid by the shareholders would be a proportionate fraction of the property’s nominal appraised value. CRA gave a ruling (albeit, apodictic) that there would be no s. 15(1) (or 246(1)) benefit to the extent that the FMV of the share of the real property so transferred to each shareholder was equal to or less than the FMV of the consideration paid therefor and, on a similar assumption that the aggregate consideration and the property’s FMV did not exceed its ACB, the corporation would not realize a gain. ...

(b) of the definition, because the equity holders of the covered entity (Acquisitionco as the holder of Targetco shares) do not receive equity of Amalco, as such equity is instead cancelled for no consideration. ... (a) of that definition and a portion of the consideration received by a holder for the Targetco shares is not equity consideration described in para. ...

In finding that this commission was consideration for the taxable supply of “the provision of the club's facilities to the dancers to enable them to obtain income from non-cash customers” (rather than merely consideration for a VAT-exempt financial service of encashing the vouchers), Richards LJ stated that “a commission of 20% for the encashment of a voucher…is on the face of it very high, particularly as the appellants ran, as they knew, a very low credit risk.” ... One distinction might be that it would have been less consonant with the “economic realities” (to use a phrase of Richards LJ) to characterize these amount as being paid by Global for access to the casino – and another, that the amounts were high, but not outrageous, when viewed as consideration only for encashing. ...

6 February 2017- 11:05pm ExxonMobil renews proposal to acquire InterOil on the same basis as before, but with an increased contingent cap Email this Content The proposal for the Exxon acquisition of InterOil contemplated that a newly-incorporated B.C. subsidiary of ExxonMobil would acquire InterOil under a Yukon Plan of Arrangement, with the consideration for each InterOil share comprising that number of ExxonMobil shares having a fixed value of U.S.$45.00 per share, plus a cash payment of U.S.$26.87 per share (or U.S.$1.37B in total). ... The Canadian tax disclosure is essentially the same as before, and indicates that the full per share CRP consideration (now of U.S.$ $33.94 rather than U.S.$26.87 per share)- as well as, of course, the share consideration of U.S.$45 per share- will be required to be included in computing a resident InterOil shareholder’s proceeds of disposition, but (under s. 42) if the repayment obligation is triggered before the filing due-date for the shareholder’s return, the repayment would reduce those proceeds of disposition. ...

13 March 2017- 12:30am OPTrust – Ontario Superior Court finds that Ontario LTT applied to contingent deferred purchase price which, in fact, never became payable Email this Content The Ontario Land Transfer Tax Act definition of “value of the consideration” includes not only the “the amount expressed in money of any consideration given or to be given for the conveyance” but also “the value expressed in money of any liability assumed or undertaken by the transferee” and of “any benefit of whatsoever kind conferred by the transferee on any person as part of the arrangement relating to the conveyance.” ... Ontario, 2016 ONSC 3648 under LTTA, s. 1- value of the consideration. ...

The acquisition occurred for cash consideration, subject to two exceptions. ... The Holdco shareholders then sold their Holdco shares as part of the Quebec Plan of Arrangement for cash consideration (corresponding to the transaction value of the underlying Canam shares) except as described below. ... Second, members of the same 27% group could timely elect to transfer their Canam or Holdco shares to the Purchaser for Purchaser shares with a value agreed to correspond to the cash consideration. ...